Extracts from the press conference by Joaquín Almunia on the statement of objections to 13 investment banks, ISDA and Markit in credit default swaps investigation

On 1 July 2013, Joaquín Almunia, Vice-President of the EC in charge of Competition, held a press conference on the statement of objections sent by the EC to 13 investment banks, ISDA and Markit in credit default swaps investigation.
The EC informed some of the world's largest investment banks of its preliminary conclusion that they infringed EU antitrust rules that prohibit anti-competitive agreements by colluding to prevent exchanges from entering the credit derivatives business between 2006 and 2009. The sending of a statement of objections does not prejudge the final outcome of the investigation.
The statement of objections is addressed to Bank of America Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, Royal Bank of Scotland, UBS as well as the International Swaps and Derivatives Association (ISDA) and data service provider Markit.
The Commission takes the preliminary view that the banks acted collectively to shut out exchanges from the market because they feared that exchange trading would have reduced their revenues from acting as intermediaries in the OTC market.

Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
PDF version

HEURE

DESCRIPTION

DUREE

00:00:00

Title

00:00:05

00:00:05

Arrival of Joaquín Almunia, Vice-President of the EC in charge of Competition, in the press room

00:00:04

00:00:09

SOUNDBITE by Joaquín Almunia (in ENGLISH): today the Commission is sending its objections to some of the world’s largest investment banks as well as two bodies that they control, Markit and the International Swaps and Derivatives Associations (ISDA); the sending of this statement of objections is a key step in our ongoing antitrust investigation into credit default swaps, which we opened in April 2011; the banks involved are Bank of America Merrill Lynch, Barclays, Bear Stearns (now part of JP Morgan), BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, UBS and the Royal Bank of Scotland.

00:00:46

00:00:55

Cutaway of the audience

00:00:05

00:01:00

SOUNDBITE by Joaquín Almunia (in ENGLISH): at the time – 2006-2009 – CDS were traded over the counter; this means that they were negotiated privately and bilaterally, rather than traded on exchanges; however, exchanges did try to enter this market; indeed, Deutsche Börse and then the Chicago Mercantile Exchange (CME) attempted to launch central clearing and exchange trading of credit derivatives, for which there was already a widespread demand among investors; to launch these exchange-traded credit derivatives, the exchanges needed licenses for data and index benchmarks; but ISDA and Markit refused to provide these licenses because - according to our findings at this stage of the investigation - the banks had instructed them not to do so.

00:00:59

00:02:00

Cutaway of the audience

00:00:05

00:02:04

SOUNDBITE by Joaquín Almunia (in ENGLISH): in the case of the Libor and Euribor investigations, I hope we can be ready to adopt a decision around the end of this year.